Hotfile agrees to shut down, pay $80M to movie industry on eve of trial

Hotfile, a prominent cyber locker that allows people to swap digital files, has agreed to shut down its operations and to pay $80 million as part of a settlement with the Motion Picture Association of America (MPAA).

The news comes via a press release by the MPAA, which won a major victory in August when it persuaded a federal judge in Florida to rule that that Hotfile did not qualify for a “safe harbor” under the Digital Millenium Copyright Act.

The August ruling paved the way for a jury trial that was to begin this week, but which is now unnecessary in light of the settlement.

The settlement amounts to a victory for Hollywood interests, which argue that cyber lockers are a vehicle for piracy. Opponents disagree, pointing out there is nothing inherently illegal about an online digital storage locker.

Ordinarily, companies that provide hosting or platform services are immune from being held liable for the actions of their users, provided they follow certain steps. In this case, the judge ruled Hotfile and its owner, Anton Titov, could not benefit from the safe harbor shield because they had actively encouraged infringement.

Earlier this week, the judge issued a noteworthy ruling that forbade lawyers for the MPIA from using terms like “piracy,” “theft” or “stealing” before the jury.